Brexit has cost the UK economy over 1% of its GDP since the referendum finds Scope Ratings

European credit rating agency Scope Ratings says even if a no deal Brexit is avoided, Brexit has already cost the UK economy over 1% of its GDP since the referendum. Anna Tobin reports

Scope Ratings expects the UK to avoid a no-deal scenario, but the rating agency says that Brexit has already cost the UK economy dearly. It states that UK economic activity has slowed since the 2016 referendum, with output around 1.1 percentage points down from pre-referendum IMF estimates, and it warns that if the Brexit uncertainty extends beyond March 2019 this loss in output may worsen.

“When Scope assessed the performance of the UK economy against the performance of the UK’s closest trading partners, it appears that the exit process may have already cost the UK at least 1.2% in output since the vote,” says Dennis Shen, analyst at Scope Ratings.

This estimate is based on analysing the growth performance of the UK’s ten largest trading partners before and after the referendum and using the historical relationship between UK economic performance and that of these trading partners to approximate UK economic over or under-performance between quarter three 2016 and quater two 2018.

Scope expects that the UK economy will see a slower annual rate of growth in 2018 in comparison with 2017. This is as a result of weaker consumer spending, weak investment, an exodus of financial-services activities and a less buoyant export performance.

On the upside, the report finds that the British economy remains diversified and competitive, with flexible labour and product markets. “However, when we observe 2018 as a whole, the UK’s underperformance, compared with other advanced economies, is likely to be meaningful,” says Shen. “It shows that there is a negative effect from the exit process on growth and fiscal performance, even before Brexit itself occurs.”

Secure Payments using

This website uses cookies to improve your experience. Please confirm that you're ok with this. You can opt-out if you wish. Cookie settingsACCEPT

Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.